Indictment — No. 2:21-cr-00264 (Dkt. 20, D. Ariz.)

Summary

The indictment, filed April 13, 2021 in the U.S. District Court for the District of Arizona, No. CR-21-00264-PHX-JJT, charges James Theodore Polzin with wire fraud under 18 U.S.C. § 1343 and with transactional money laundering under 18 U.S.C. §1957(a) in Counts 6-26. It alleges that Polzin, described as a self-employed accountant, submitted Economic Injury Disaster Loan applications claiming non-existent employees and revenues for businesses including Transparen CPAS LLC and POLZIN Holdings LLC. One application for a $150,000 EIDL is alleged to have represented revenue of $12,507,874 and 16 employees; the SBA did not approve it. The forfeiture allegations seek a sum of money equal to at least $2,693,308 and name real property in Maricopa County, Arizona. The grand jury foreperson and Assistant U.S. Attorney Kevin M. Rapp signed it on April 13, 2021.

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Case 2:21-cr-00264-JJT Document 20 Filed 04/13/21 Page 1 of 10

L.

Vf FILED ___ LODGED

___ RECEIVED ___ COPY
PAUL ANTHONY MARTIN
Acting United States Attorney APR 13 2021
District of Arizona _
KEVIN M. RAPP CLERK U S DISTRICT COURT
Assistant United States Attorney ISTRCT OC NRO SUTY
Arizona State Bar No. 014249 BY é
Two Renaissance Square
40 N. Central Ave., Suite 1800
Telephone: 602-514-7500

elephone: -314- aehar om

Email: Kevin.Rapp@usdoj.gov | REDACTED FUR
Attorneys for Plaintiff y UBLIC DISCLOSyRE

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ARIZONA

CR-21-00264-PHX-JJT (DMF)

United States of America, No.

Plaintiff,

INDICTMENT
VS.
VIO:
James Theodore Polzin, 18 U.S.C. § 1343
(Wire Fraud)
Defendant. ounts 1-5

18 U.S.C. §1957(a)
(Transactional Money Laundering)
Counts 6-26

18 U.S.C. § 981(a)(1)(C)
18 U.S.C. § 982(a)(1
28 U.S.C. § 2461(c
Forfeiture Allegations

THE GRAND JURY CHARGES:
DEFENDANT

1. James Theodore Polzin (“POLZIN”), age 46, is a self-employed accountant
and recently owned and operated a company known as TSP Imports LLC. He resides in
both Gilbert, Arizona, and Ukraine.

INTRODUCTION
2. On March 27, 2020, the U.S. President signed a $2.2 trillion stimulus bill

called the CARES Act, which was intended to ameliorate the economic impact of the


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Case 2:21-cr-00264-JJT Document 20 Filed 04/13/21 Page 2 of 10

COVID-19 Pandemic. See Pub. L. 116-136. Under the provisions of the CARES Act, $2.2
trillion dollars in economic stimulus was passed by the 116th U.S. Congress and signed
into law by the President in March 2020 in response to the economic decline caused by the
COVID-19 pandemic in the United States.

3. The provisions of the CARES Act, in conjunction with an officially declared
disaster by the United States Government, allowed for the Small Business Administration
(SBA) to offer Economic Injury Disaster Loan (EIDL) funding to business owners
negatively affected by the COVID-19 pandemic. Using the SBA online portal, EIDL
applicants submit personal and business information in support of each EIDL application,
and they do not have to submit supporting documentation of any sort.

4, The application includes a jurat-like paragraph where the applicant affirms
that the information submitted is true and correct under the penalty of perjury and
applicable criminal statutes. The application process involves filling out assorted data
fields relating to the size of the affected business entity, the ownership of said business,
and other information such as the number of employees and gross business revenues
realized in the 12 months prior to the COVID-19 impact on the national economy. This
information, submitted by the applicant, is then used by SBA systems to calculate the
principal amount of money the small business is eligible to receive in the form of an EIDL.
However, in conjunction with the submission of an EIDL application, by simply clicking
on and checking a box within the on-line application, an applicant may request and then
receive up to $10,000.00 in an EIDL Cash Advance Grant based on the number of
employees claimed. The EIDL Cash Advance Grant need not be repaid to the SBA if the
loan application is ultimately denied by the SBA, or if the applicant declines the EIDL that
may be offered by the SBA at a later date.

5. The SBA Office of Disaster Assistance (ODA) controls the EIDL program.
The ODA has authority over all loans created and disbursed under the EIDL program.
EIDL principal proceeds and available Cash Advance Grants (up to $10,000) are solely


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Case 2:21-cr-00264-JJT Document 20 Filed 04/13/21 Page 3 of 10

funded by the SBA and are disbursed from government-controlled accounts maintained
with the U.S. Treasury at Federal Reserve Banks throughout the United States.

6. Pursuant to the provisions governing the EIDL program, loan proceeds must
be used by that business on certain permissible expenses. The EIDL (working capital)
loans may be used by the afflicted business, which must have existed in an operational
condition on February 1, 2020, to pay fixed debts, payroll, accounts payable, and other bills
that could have been paid had the COVID-19 disaster not occurred.

EIDL APPLICATIONS SUBMITTED BY POLZIN
“Transparen CPAS LLC/Transparen CPAS/Transparen CPA/POLZIN Holdings
LLC”

7. The Small Business Administration (SBA) is responsible for extending loans
to businesses applying for loans associated with the EIDL program. POLZIN submitted
loan documents on or about May 2020 through July 2020 bearing the signature of POLZIN.
Each application sought an EIDL loan for businesses identified as Transparen CPAS LLC,
Transparen CPAS, Transparen CPA, and POLZIN Holdings LLC. Separate loans were
filed for Transparen CPAS and Transparen CPAS LLC as the former is POLZIN’s Sole
Proprietorship and the latter is his Limited Liability Company. Each application identified
POLZIN as owning 100% of the business. On each of the applications, POLZIN listed his
residential address as XXXX S. Val Vista Dr., #218 Mesa, AZ.

8. Transparen CPAS LLC was formed/registered on or about May 22, 2017.
In order to support an EIDL in the amount of $150,000 for application 3000001644/loan
9556727802 utilizing EIN XX-XX19913, POLZIN represented that the business,
Transparen CPAS LLC, had revenue of $645,000 and nine employees.

9. In order to support a second EIDL in the amount of $150,000 for application
3601386837/loan 7800007909 utilizing EIN XX-XX75306, POLZIN represented that the
business, Transparen CPAS, had revenue of $1,205,401 and 16 employees. In addition,
POLZIN provided the SBA with an IRS Schedule C (Form 1040 or 1040-SR) which
represented Transparen CPAS had wages of $864,000.00.

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10. In order to support a third EIDL in the amount of $150,000 for application
3000003864 utilizing EIN XX-XX19913, POLZIN represented that the business,
Transparen CPAS LLC, had revenue of $952,000 and 11 employees. This application was
not approved by the SBA. |

11. In order to support a fourth EIDL in the amount of $150,000 for application
3304691591 utilizing EIN XX-XX75306, POLZIN represented that the business,
Transparen CPA, had revenue of $12,507,874 and 16 employees. This application was not
approved by the SBA.

12. POLZIN Holdings LLC was formed/registered on or about March 14, 2019.
In order to support an EIDL in the amount of $150,000 for application 3306367687/loan
9193768002 utilizing EIN XX-XX90157, POLZIN represented that the business, POLZIN
Holdings LLC, had revenue of $554,650 and eight employees.

13. | Department of Economic Security (DES) payroll records for Transparen
CPAS LLC (EIN XX-XX19913) showed no quarterly tax and wage reports for the third
and fourth quarters of 2019. The first quarter of 2019 listed two employees, POLZIN and
L.P., with total wages of $18,450.00. The second quarter listed three employees: POLZIN,
L.P., and R.G. Second quarter wages totaled $21,100.00.

14. DES payroll records for POLZIN’s SSN (XXX-X7-5306), which was used
as his EIN for Transparen CPAS, showed no additional wages. DES payroll records for
POLZIN Holdings LLC (EIN XX-XX90157) revealed no records/wages.

15. On each of the approved EIDL applications, POLZIN signed the Loan
Authorization and Agreement documents using DocuSign technologies.

PURCHASE OF RESIDENCE AND LUXURY VEHICLE

16. POLZIN purchased with cash the property located at XXX N. Coronado

Dr., Gilbert, Arizona 85234, on June 19, 2020, for $385,000.00. Recorded documents

show the house was purchased with cash.
17. POLZIN opened a BMO Harris Business Advantage Checking Account
XXXXXX1088 (Account 1) on December 17, 2019, in the name of Transparen CPAS

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Case 2:21-cr-00264-JJT Document 20 Filed 04/13/21 Page 5 of 10

LLC. Also, on December 17, 2019, POLZIN opened a BMO Harris Smart Advantage
Account XXXXXX7848 (Account 2) in the name of POLZIN and S. P.

18. Account 1 was opened with a $100.00 deposit and received no further
deposits until April 27, 2020, when the account received a PPP loan disbursal of
$180,095.37. Between April and June 2020, Account 1 received approximately
$740,957.37 in EIDL and PPP loans. During the same time period, Account 1 received
approximately $161,114.45 in other deposits. Account 2 received a $218,962.00 PPP loan
disbursal on June 10, 2020, and a total of $475,000.00 in transfers from Account 1 between
May and June 2020. Bank records show on June 23, 2020, $388,198.34 was wired to a
title company from Account 2.

19. In addition to the residence detailed above POLZIN purchased a 2017
Porsche 911 Vin #XXXXXX98HS178457 via Bank of America Cashier’s Check
#XXXX8714315, dated June 19, 2020 in the amount of $159,461.64, payable to Luxury
Auto Collection. The source of the funds was comprised of three fraudulent loans obtained
from the SBA.

20. The loan Authorization and Agreement signed by POLZIN specifically
require that the EIDL funds be used for working capital to alleviate economic injury caused
by disaster occurring in the months of January 31, 2020, and continuing thereafter and not

for the purchase of a private residence, vacation home or luxury vehicle.

COUNTS 1-5
Wire Fraud
[18 U.S.C. §1343]

21. Paragraphs 1 through 20 of this indictment are re-alleged and incorporated

by reference as though fully set forth herein.

MANNER AND MEANS OF THE SCHEME TO DEFRAUD

22. POLZIN’S scheme targeted the SBA with the intention of defrauding the
SBA of EIDL Program as authorized under the provisions of the CARES Act by providing

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Case 2:21-cr-00264-JJT Document 20 Filed 04/13/21 Page 6 of 10

materially false loan applications claiming non-existent employees and revenues for
business entities owned and operated by POLZIN. In furtherance of the scheme to defraud,
POLZIN submitted supporting loan documents that contained contradicting information
for the same business on each application. These representations were false|and fraudulent.
POLZIN made these misrepresentations with the intent to defraud the United States in
order to obtain loan proceeds that he was not entitled to.

23. POLZIN, for the purpose of executing the aforesaid scheme and artifice, did
knowingly make materially false, fictitious, or fraudulent statements or representations, or
make or uses any false writing or document knowing the same to contain any materially
false, fictitious, or fraudulent statement or representation regarding the number of
employees and revenue:

24. On or about the dates specified as to each count below, Maricopa County,
in the District of Arizona, POLZIN, for the purpose of executing the aforesaid scheme
and artifice, did knowingly transmit and cause to be transmitted, by means of wire

communications in interstate and foreign commerce, certain writings, signs, signals,

pictures, and sounds, as more particularly described in the following table.

Count Date Business Application/ IP Address Receiving
Name Loan Server
1 4/3/20 | Transparen | 3000003864 91.192.44.58 Rapid
CPAS Chernihiv, Finance,
LLC Ukraine Central US,
Region, Iowa
2 5/30/20 | Transparen | 3000001644/ | 184.187.219.220 Rapid
CPAS 5556727802 Chandler, AZ/ Finance,
LLC 188.163.21.106 Central US,
Chernihiv, Region, lowa
Ukraine
3 6/16/20 | Transparen | 3304691591 184.187.219.220 Rapid
CPA Chandler, AZ Finance,
Central US,
Region, Iowa
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Case 2:21-cr-00264-JJT Document 20 Filed 04/13/21 Page 7 of 10

4 6/17/20 | Transparen | 3601386837/ 174.192.78.49 Rapid
CPAS LLC | 7800007909 Green Bay, WI/ Finance,
104.143.92.249 Central US,
San Francisco, Region, Iowa
CA
5 7/7/20 POLZIN _ | 3306367687/ 74.213.234.35 | Rapid
Holdings | 9193768002 Gardena, CA/ Finance,
LLC 184.187.219.220 Central US,
Chandler, AZ Region, Iowa

All in violation of Title 18, U.S.C. § 1343.

25.

COUNTS 6-26

Transactional Money Laundering
[18 U.S.C. 1957(a)]

Paragraphs | through 24 of this Indictment are re-alleged and incorporated

by reference as though fully set forth herein.

26.
identified below, in the District of Arizona and elsewhere, POLZIN knowingly engaged in

monetary transactions from his accounts located at BMO Harris and Bank of America, of

Between May 2020 and March 2021, the specific dates and transactions

a value greater than $10,000, occurring within the United States, with funds criminally

derived from wire fraud as alleged in Counts 1-5 of this Indictment and other fraudulent

activity conducted by POLZIN during the relevant time period, with each transaction being

a separate count of this Indictment, as follows:

Date of
Count Transaction Description of Transaction Transaction . .
(on or Amount Financial
about) Institution
Transfer from Transparen BMO x1088
6 | 05/01/2020 to Polzin BMO x7848 $35,000.00 | Mo Harris
Check Paid to James Polzin from
7 05/07/2020 Transparen BMO x1088 $50,000.00 BMO Harris
Transfer from Transparen BMO x1088
8 05/07/2020 to Polzin BMO x7848 $40,000.00 BMO Harris
Wire Sent to Joint Stock Commercial
9 05/15/2020 fbo S.P., Pop Family Support from $50,000.00 Bank of
Polzin BofA x3557 America
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Case 2:21-cr-00264-JJT Document 20 Filed 04/13/21 Page 8 of 10

Wire Sent to Ukgras Bank fbo James

10 05/22/2020 Polzin, Pop Family Support from $40,000.00 Bank of
Polzin BofA x3557 America
Wire Sent to Ukgras Bank fbo James
11 05/26/2020 Polzin, Pop Family Support from $50,000.00
. Bank of
Polzin BofA x3557 .
America
Deposit EMG Homes ACH into
2 06/04/2020 Transparen BMO x1088 $20,251.20 BMO Harris
Deposit Aurora Homes Check into
13 06/10/2020 Transparen BMO x1088 $40,799.00 BMO Harris
Transfer to James Theodore Polzin
14 06/10/2020 Confirmation# 1878766613 from $15,000.00
: Bank of
Polzin BofA x3557 .
America
Check Paid to D. R. from Transparen
15 06/12/2020 BMO x1088 $10,700.00 BMO Harris
Requested Withdrawal from
16 06/18/2020 Transparen BMO x1088 $300,000.00 BMO Harris
Deposit of $300,000 funds from
17 06/18/2020 Transparen BMO x1088 into Polzin | $300,000.00
BMO x7848 BMO Harris
Purchase of Cashier’s Check, payable
18 06/19/2020 | to Luxury Auto Collection from Polzin $159,461.64
Bank of
BofA x3557 .
America
Wire transfer to Magnus Title for the
19 06/23/2020 purchase of 902 N. Coronado from $388,198.34
Polzin BMO x7848 BMO Harris
Requested Withdrawal from
20 06/25/2020 Transparen BMO x1088 $100,000.00 BMO Harris
Deposit of $100,000 funds from
21 06/25/2020 Transparen BMO x1088 into Polzin | $100,000.00
BMO x7848 BMO Harris
Check Paid to Wolff Development
22 06/26/2020 from Transparen BMO x1088 $50,000.00 BMO Harris
Deposit of E.M., PLLC Check into
23 07/27/2020 Transparen BMO x1088 $29,161.75 BMO Harris
Wire Sent to Ukgras Bank fbo James
24 08/04/2020 Polzin, Pop Family Support from $70,000.00
. Bank of
Polzin BofA x3557 .
America
Wire Sent to Ukgras Bank fbo James
25 08/12/2020 Polzin, Pop Family Support from $90,000.00 Bank of
Polzin BofA x3557 an ©
America
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Case 2:21-cr-00264-JJT Document 20 Filed 04/13/21 Page 9 of 10

Deposit of Luxury Auto Collection
26 03/17/2021 check #25806 for the resale of the $126,000.00 Capital One

Porsche 911

All in violation of Title 18, U.S.C. § 1957(a).

FORFEITURE ALLEGATIONS |
27. The Grand Jury realleges and incorporates the allegations of Counts 1

through 26 of this Indictment, which are incorporated by reference as though fully set forth
herein.

28. Pursuant to Title 18, United States Code, Sections 981 and 982, Title 21,
United States Code, Section 853 and Title 28, United States Code, Section 2461(c) and
upon conviction of one or more of the offenses alleged in Counts 1 through 26 of this
Superseding Indictment, the defendant(s) shall forfeit to the United States all right, title,
and interest in any and all property, real or personal, involved in such offense(s), or any
property traceable to such property involved in the offense(s), or conspiracy to commit
such offense(s), including the following: (a) all money or other property that was the
subject of each transaction, transportation, transmission or transfer in violation of a statute
listed in Title 18, United States Code, Section 982, (b) all other property constituting
proceeds obtained as a result of those violations, and (c) all property used in any manner
or part to commit or to facilitate the commission of those violations including, but not
limited to the sum of money representing the amount of money involved in the offense(s)
and the property named below.

a. A sum of money equal to at least $2,693,308 in United States currency,
representing the amount of money involved in the offenses.

b. All right, title, and interest in any and all personal property, involved in or
traceable to any transaction set forth in Counts 1 through 26 of this
Indictment. Such property includes, but is not limited to, the following real
property:

i. 902 N. Coronado Drive, Gilbert, Arizona, 85234, titled in the name of

James T. Polzin and Svitlana O. Popsii, and more specifically

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Case 2:21-cr-00264-JJT Document 20 Filed 04/13/21 Page 10 of 10

described as Lot 110, Discovery Park at Val Vista Lakes, according
to Book 298 of Maps, page 26, records of Maricopa County, Arizona.
APN: 304-98-110.

A TRUE BILL

/S/
FOREPERSON OF THE GRAND JURY
Date: April 13, 2021

PAUL ANTHONY MARTIN
Acting United States Attorney
District of Arizona

/S/
KEVIN M. RAPP
Assistant U.S. Attorney

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